While you may prepare as best you can for an emergency, sometimes the unexpected can hit you hard.
That’s especially true when it comes to healthcare. Even if you have savings and health insurance, a single medical crisis can wipe out all of your bank accounts and cause you to rack up medical debt in the process.
If you need help paying medical bills or risk going to medical collections, please know there are steps you can take.
Below are five ways you can handle your medical debt quickly and efficiently. While none of these options are ideal–you can end up paying back more with interest–they will help you manage your debt without going broke.
1. Review your bill with a professional
If you spent time in the hospital and are now facing thousands of dollars in hospital bills, Dr. R. Ruth Linden, president of Tree of Life Health Advocates, recommends asking an expert for help to review your bill.
“Retain a medical billing expert to comb the statement(s) for services that may never have been delivered, duplicate charges, incorrect codes, and the like,” says Dr. Linden.
A medical billing expert can sometimes find errors that would have otherwise cost you hundreds or even thousands of dollars.
And if a billing advocate doesn’t find any errors they most likely will not charge for their services, according to Dr. Linden.
2. Contact the provider directly
If there are no errors found on the bill, Dr. Linden still recommends reaching out to the healthcare provider.
“In the case of a hospital bill, apply to the provider for financial assistance,” Dr. Linden explains. “For non-hospital providers, request full or partial forgiveness of the bill.”
In many cases, a letter can make all the difference in reducing your bill.
“My experience is that a skillfully crafted letter that includes a detailed explanation of one’s financial situation and other relevant, challenging circumstances, followed by telephone calls, can result in a significant reduction or complete elimination of the balance due,” says Dr. Linden.
If your healthcare provider is not willing to reduce your balance, they may be willing to put you on a payment plan. This would let you pay in installments, rather than demanding you pay the balance all at once.
You may even be able to spread your repayment out over the course of a few years, making a large amount of medical debt more manageable on your household budget.
3. Sign up for CareCredit
CareCredit is a credit card designed specifically for out-of-pocket medical costs. Most medical offices will accept CareCredit as payment, and the company offers promotional offers to make payments more affordable.
When you make a charge, you generally get a promotional period of six to 24 months, depending on the procedure you charge and its cost. During the promotional period, the company does not charge any interest.
And if you pay off the balance in full before the promotional period ends, you pay zero interest on the charge.
However, if you still have a balance after the promotional period ends, you will get hit with interest that accrued throughout the whole promotion, adding hundreds or thousands to your bill.
While CareCredit can be useful, choose this route carefully to avoid extra charges.
4. Take out a personal loan
Another option to consider is taking out a personal loan.
If you’re facing a financial emergency due to medical debt, personal loans can be a way to manage your expenses without resorting to high-interest credit cards or dangerous payday loans.
While you will pay interest with a personal loan, the interest rates are generally much lower than a credit card.
Keep in mind, however, that taking out a personal loan is a big financial decision. And if you miss payments, it can have serious ramifications on your finances.
Therefore, weigh your options carefully before going this route. Additionally, make sure you have a repayment plan in place to manage the debt.
5. Negotiate the balance
In some circumstances, the hospital or medical office would rather get some money rather than not at all. That’s why Dr. Linden encourages people to contact the provider to negotiate.
“This is the most important and least often used tool,” Dr. Linden says. “If no errors, duplicate charges, incorrect codes, etc. have been found and a written request for forgiveness falls on deaf ears, negotiate the balance due.”
In many cases, the provider will reduce the bill in return for quick payment.
“To wit, a patient might say, ‘If you’ll accept X% of the balance due as full and final payment by the first of next month, I will send you a check. Would you agree to this arrangement? Yes? Good. I’ll follow up in writing that we’ve settled on this plan,’” says Dr. Linden.
Managing medical debt isn’t hopeless
Handling a medical emergency can be physically, mentally, and financially draining. However, using any of the options listed above can help minimize the impact of medical debt on your future.
For more information on how to manage a crisis that may wreck your bank account, check out this article on where to keep your emergency fund.
Interested in a personal loan?Here are the top personal loan lenders of 2018!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.
** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|7.73% – 29.99%||$1,000 - $50,000||Visit Upstart|
|6.26% – 14.87%1||$5,000 - $100,000||Visit SoFi|
|6.99% – 35.97%*||$1,000 - $50,000||Visit Upgrade|
|5.99% – 24.99%2||$5,000 - $35,000||Visit Payoff|
|4.99% – 29.99%3||$10,000 - $35,000||Visit FreedomPlus|
|5.99% – 18.99%4||$5,000 - $50,000||Visit Citizens|
|15.49% – 34.49%5||$2,000 - $25,000||Visit LendingPoint|
|6.16% – 35.89%6||$1,000 - $40,000||Visit LendingClub|
|6.99% – 18.24%7||$5,000 - $75,000||Visit Earnest|
|9.95% – 35.99%8||$2,000 - $35,000||Visit Avant|